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JSE-listed Telkom has dismissed the allegations of excessive job cuts and race-based retrenchments made by trade unions this week.
The South African Communication Union earlier this week announced its intention of taking Telkom to court, believing the telecommunications giant planned to retrench about 9 500 of its 19 000 employees over the next six months, while Solidarity moved to halt the retrenchment process it said was based on race.
Telkom, stating that the allegations were unfounded, explained that no specific number of job cuts were targeted, but that the company aimed to achieve an employee cost:revenue ratio of 25% over the next five years and that it would reduce the number of management layers.
The group stated that employee costs currently accounted for 30% of revenue.
The 2 650-strong management pool would be trimmed down between June and March 2015 – with the consultative process currently under way – to bring leadership closer to customers and improve the customer service experience by removing unnecessary layers of management.
Solidarity believed that about 345 managers would be retrenched.
In a May 15 Section 189 notification letter to employees, Telkom outlined its operational concerns, stating that the interventions, such as the voluntary severance and voluntary early retirement packages, did not yield the desired result of significantly reducing the “steep” – and increasing – human capital costs, which “exceeded that of other benchmarked telecommunications companies of a comparable size”.
“… the company is left with no choice but to give notice of its contemplation of managerial and specialist employee dismissals,” the group said.
Dismissing Solidarity’s race-based retrenchment claims, the company stressed that race was not being considered “as the only criteria for the placement of employees” in the new structure.
Telkom said its focus was on retaining the right skills for its turnaround strategy and several criteria, including qualifications and experience; the employee’s potential; the last-in, first-out principle when more than one employee qualifies for appointment into the same position; and employment equity, would be considered throughout the restructuring process.
“It is important to note that employment equity is only one of the four criteria applied to this process and that Telkom, as any South African company is, is required in terms of the Employment Equity Act to comply.
Solidarity, which launched an extensive campaign against Telkom’s current retrenchment process, stated that Telkom would have to retrench more than 5 000 white employees from the company to achieve the race targets of its employment equity plan.
“This would mean that, in accordance with its current racial composition, up to 70% of all white employees at the company would have to be retrenched,” Solidarity deputy general secretary Johan Kruger explained.